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I have open collections on my credit, nothing large but enough to prevent me from getting this loan. If I pay these off (which I have not had the extra funds to do until recently, irresponsibility, long story, etc. etc.) how soon will that information be reflected in my credit report? What I've been reading is that the Feds just look to see if you have open collections, so if I just pay them and wait to apply until they can show as paid or have been removed altogether, I'll have a better chance of getting the loan. But if it's going to take more than 2 months I'd rather just try to find a cosigner and take my chances.

So to reiterate, if I wait to apply for the loan until these accounts have been paid off, will that be more beneficial for me?

Thoughts?

It is counter intuitive, but depending on how old these debts are, you may be better off not paying them then paying them. Why? Because once you take any action on those debts, the seven year clock for them to be removed from your credit report is restarted.

So, how old are these debts?

They aren't more than 7 years old, and they fall within the 5 year window the Feds specify.

You can pay them off and it typically takes between 30 and 90 days to be reflected on your credit reports. However, you can have the payees write you receipts/letters of satisfaction that the GradPlus people should accept as proof of payment. Speaking with the GradPlus processors would be a good plan as they know what specific documentation they require.

One thing you can do is call the credit reporting agencies and challenge the debt(s). I think they generally get it taken care of quickly (so I've been told)...or at least quicker than it would otherwise be reported.

I'm in a similar boat as you, and I'm going to call to challenge tomorrow. I'll let you know how it goes.

Adora, did you mean call and challenge after you pay, or before you pay to make them sit up and take notice of you?

Appreciate it! I will likewise keep you guys appraised of my progress.

If u take a look at your report on annualcreditreport.com, it tells u when accounts roll off. It does NOT start the clock over when paid. Mine say 2014. I went in collections in 2007. All mine r all paid.

wakahaka wrote:Adora, did you mean call and challenge after you pay, or before you pay to make them sit up and take notice of you?

Appreciate it! I will likewise keep you guys appraised of my progress.

After they're paid, call the credit reporting agencies. I think the way it works is: they call the people who reported it, they say it's paid, and the rest is history.

I thought this might be useful to some of you. I have things on my credit report that should have absolutely prevented me from receiving the Grad PLUS loan without a cosigner. These items are similar to the things listed by the previous posters in this thread. However, I decided to go ahead and apply before going the cosigner route. I was approved instantly after applying online at the .gov site. I can attest to the fact that the listed qualification guidelines are NOT necessarily strictly enforced in determining who qualifies.

adora wrote:One thing you can do is call the credit reporting agencies and challenge the debt(s). I think they generally get it taken care of quickly (so I've been told)...or at least quicker than it would otherwise be reported.

I'm in a similar boat as you, and I'm going to call to challenge tomorrow. I'll let you know how it goes.

That is not an easy or quick process, from my experience.

andreea7 wrote:

adora wrote:One thing you can do is call the credit reporting agencies and challenge the debt(s). I think they generally get it taken care of quickly (so I've been told)...or at least quicker than it would otherwise be reported.

I'm in a similar boat as you, and I'm going to call to challenge tomorrow. I'll let you know how it goes.

That is not an easy or quick process, from my experience.

I think I way-oversimplified. But I have heard it's faster than just waiting than the debtors to report that your account is paid in full to the credit agencies.

+1 at chris. I have paid charge offs and I still was approved